Artificial Intelligence (AI) and Copyright Law

Artificial Intelligence (AI) is rapidly transforming nearly every sector of the legal industry, and intellectual property (IP) law is no exception. As AI continues to evolve, it introduces complex questions that challenge traditional legal frameworks. The technology’s rapid advancement has contributed to widespread legal uncertainty. Courts are in the process of tackling the issues of ownership and infringement when AI is involved. It is widely believed that Kadrey et al. v. Meta Platforms, a case pending in N.D. California, may offer some much-needed guidance in this area.

The Meta case will decide whether a company can use copyrighted works in the creation of AI models. At a hearing on May 1, 2025, U.S. District Judge Vince Chhabria considered Meta’s claim that it made “fair use” of works by multiple authors, including Junot Diaz and comedian Sarah Silverman, to train its Llama AI model.

What is Fair Use?

Fair use is a legal doctrine that permits the use of copyrighted material without the copyright holder’s permission under certain circumstances. Section 107 of the Copyright Act outlines the criteria for determining whether an unauthorized use qualifies as fair use rather than copyright infringement. In making this determination, courts consider the following four factors:

“(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.”

Andy Warhol Found. for Visual Arts, Inc. v. Goldsmith, 11 F.4th 26 (2d Cir. 2021), aff’d sub nom. Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508, 143 S. Ct. 1258, 215 L. Ed. 2d 473 (2023)

What Does This Mean for Creators?

Meta may become a significant turning point for AI and intellectual property law. If Judge Chhabria finds that Meta’s use of copyrighted works to train its AI models constitutes fair use, it could substantially weaken the rights of copyright holders and diminish the value of their creative works. Allowing AI systems to use protected works and generate unlimited iterations without compensating the original creators undermines the economic benefits of copyright protections. In this case, copyright holders would not only lose potential revenue but also control over the use and integrity of their work.

Such a ruling could also have a negative effect on creativity, deterring authors, artists, and innovators from producing new works in the first place. This is contrary to the very purpose of the Copyright Act, which was designed to encourage and protect original expression.

In order to preserve the integrity of the copyright system and the livelihoods of creators, the Court may consider a narrower interpretation of fair use in the AI context, which we have seen in the past in other contexts.

Should the Court decide not to impose such limits, experts have suggested alternative frameworks to protect creators, such as implementing blockchain-based solutions or NFT-style licensing systems to ensure fair compensation when copyrighted material is used in AI training models. However, this still needs to be explored further on how it would work in the real world.

While the Meta decision is extremely important due to the groundbreaking central issue in the case, it is not binding on Courts across the nation.  We will therefore continue to watch for other cases on this emerging topic.

By: Brittany K. Singh

Associate, The Bostany Law Firm PLLC